LONDON  - The dollar rose against the euro and yen on Monday as markets cheered measures by Washington to bolster US mortgage giants Fannie Mae and Freddie Mac, dealers said. But the greenback's gains were limited amid ongoing worries about the health of the US economy and a slew of earnings results from major US banks due this week, they added. The European single currency fell to 1.5872 dollars in early London trade, from 1.5932 dollars late on Friday. Against the yen, the dollar gained to 106.70 yen from 106.25. The US currency was supported after US Treasury Secretary Henry Paulson on Sunday announced bigger credit lines for Fannie Mae and Freddie Mac, which offer vital support to the multitrillion-dollar US mortgage market. The steps "boosted hopes that some calm will return to US financial markets," said Kazuhiko Shibata, Tokyo branch manager of Dresdner Bank. Fannie Mae and Freddie Mac together own or guarantee about 40 percent of the total value of home loans in the US. "It now seems unthinkable that the US government will just let those (two companies) go under without doing anything. That should be taken as something positive," Deutsche Securities strategist Koji Fukaya told Dow Jones Newswires. But the measures do not mean that the US economy is in better shape than before or that interest rates there are set to be raised, "so it's tough to buy the dollar," Fukaya said. Paulson said the two organisations would get a bigger credit line "temporarily," without giving further details. He said the Treasury Department would get temporary authority to buy their shares should that be necessary. Meanwhile the Federal Reserve Bank of New York was granted the authority to lend to Fannie Mae and Freddie Mac if needed. Markets saw the moves as an effort to stave off a repeat of the turmoil triggered by the collapse of US investment bank Bear Stearns in March, due to the subprime loan crisis, said Shibata of Dresdner Bank. In London trading on Monday morning, the euro changed hands at 1.5872 dollars against 1.5932 late on Friday, at 169.36 yen (169.29), 0.8003 pounds (0.8012) and 1.6234 Swiss francs (1.6194). The dollar stood at 106.70 yen (106.25) and 1.0225 Swiss francs (1.0163). The pound was at 1.9823 dollars (1.9884).